Economic Injury Disaster Loan

The SBA offers these loans to small businesses in the event of natural disasters and other emergencies that create significant economic hardships. During the Covid 19 crisis, all 50 states, plus the District of Columbia, Puerto Rico, American Samoa, Guam, the Northern Mariana Islands, and the US Virgin Islands are able to apply for this loan program. The loans provide businesses a way to pay normal operating expenses that can’t be paid during a disaster. 

Last Updated — March 31, 2019

 

Can be used to pay for —

[✓] — Payroll

[✓] — Accounts Payable

[✓] — Pay for increased costs to obtain materials due to interrupted supply chains 

 

[✓] — Employee sick leave

[✓] — Regular debt payments 

[✓] — Rent or mortgage payments

[✓] — Other bills

 

Great for —

  • No fee for paying off early.

  • First payment is typically not due for 12 months

  • Can request an advance of no more than $10,000 within 3 days of the SBA receiving the application.

  • Typically businesses must prove they can’t access loans elsewhere but this has been removed for COVID-19 

Things to Watch Out For —

  • Despite the government guarantee, this loan program will still ask for the business owners to become personally responsible if the loan is more than $200k and the company is unable to make payments. 

  • Despite the first payment not being due for up to 12 months, interest begins accruing from the date the loan was made.

  • It can take up to 3 weeks for loan approval and if approved, funds are typically dispersed within five days of loan closing.

  • You will not be eligible for loan forgiveness if you have already laid off employees.

  • Cannot use this loan to pay for the same expenses if the company also has a PPP loan.

Apply here and be sure to select “Economic Injury” as the reason for applying. Businesses can call 1-800-659-2955 for help with the application.

← Back